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Going to college was the easy part.  Paying off your student loans is the hard part.  And if you’re not careful, it may take you a lifetime to do it. In the meantime, making your monthly student loan payments for the next ten, fifteen or thirty years will leave you feeling drained.

Some Startling Facts

According to Finaid.org, student loan payments are strangling a lot of college graduates. They offer some startling facts. For example:

• 65% of 4 year undergraduate students graduate with student loan debt.
• The average student loan debt is over $23,000.
• 14.6% of student loan borrowers graduated with over $40,000 in debt.

Instead of spending a lifetime digging out of student loan debt, the smart graduate will work to pay off their educational loans early. By creating a plan and sticking to it, student loan borrowers can pay off a small loan in one to three years and a moderate loan in four to six years.

Five Ways to Pay Off Your Student Loans

Here are five way things you can do to get out from under your student loans early so you can stop paying and start living.

1. Eliminate extras: Cut out designer coffee, movie nights and dinners on the town. You can use the cash you save to pay down your student loan debts.
2. Sell your car: The money you spend on car payments, insurance and gas can be reallocated to lightening your debt load. Use public transportation or get a bike.
3. Move home: Getting out from under Mom and Dad’s thumb may be a dream- come-true. But if you stay at home for an extra year you can chip off a big chunk of your debt.
4. Take a second, or third, job: By taking a minimum wage job and working twenty extra hours a week you can earn seven thousand additional dollars towards your student loans in one year.
5. Sell your stuff: It’s just stuff. And most of it you probably don’t need. Cashing out your trash will help slice your student loans.

What Not To Do

Don’t be tempted or get too creative. You may regret it. Some solutions may seem attractive at first, but in the end, they’re a recipe for trouble. Here are a few tricks you’ll want to avoid:

1. Skipping payments: If you fail to pay your student loans or don’t pay on time, your credit rating may be adversely impacted.
2. Using your credit card or a home equity loan: Rolling your educational debt into another loan won’t solve your problem. It will just create more debt.
3. Cashing out your retirement funds: If you tap into a 401K plan, you’ll likely take a big tax hit. In the end, you’ll end up losing money instead of saving.

Don’t spend the rest of your life paying off your student loan debts. Make a plan and stick to it. If you do, you’ll be out of debt before you know it.

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When money is scarce, people may rely on payday loans or cash advances to get them through until the next payday. Although the fast processing and approval time for payday loans make it ideal for emergency situations, there are factors involved that can keep you further in debt. To avoid such a situation, borrowers need to learn ways in which to properly manage their payday loans, which include:

Only accepting the bare minimum needed

If you only want to take out $300 for a payday loan or cash advance, but you are approved for $500, then do not be tempted to accept the higher amount. You may often be offered more than you have requested if your credit rating is ideal because the payday loan company knows you are a low liability. It can also be because you generate enough monthly net income to qualify for higher amounts or have collateral.

You must keep in mind that a higher amount will result in an even higher amount that will need to be repaid. Because of this, only accept the bare minimum that you need to keep the interest rates and other finance fees low on your payday loan.

Ensuring the deadline is met

If you are late with repaying your loan amount and its additional charges, then you will only acquire even more charges. Because the amount of time you are given is relatively short, then you must ensure that the amount you borrow can be repaid completely within that timeframe to avoid late charges.

For those that cannot meet the deadline, you can see if the payday loan company will allow a rollover, which is an extension. However, extending the payday loan will also result in additional interest rates charges and a higher amount owing.

Only using payday loans for emergencies

Although you may be tempted to use payday loans for a luxury item, it is not a healthy decision. Because of the high rates and the short repayment time, you may find yourself further in debt. This is why you must only use payday loans to cover emergency expenses until you next receive your paycheck.

Always remember that payday loans are designed to be short-term loans. As long as you do this and manage the loans accordingly, then you will be able to free yourself from financial trouble as opposed to creating more of it.

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Small business lending is on the rise but it will not look like the free-wheeling days of old. According to Wells Fargo, banks are back to looking for small businesses to demonstrate their ability to address the old fashioned Six C’s of Credit:

Capacity

What is your capacity to grow? What are your cash flows, profit, and debt levels? How will you repay the loan?

Character/Credit Score

What is your personal and small business history of credit management?

Conditions

What is the purpose of the loan? How will the money be used?

Capital

How much of your own money and investor money do you have in the business? Banks want to see a personal stake in the success of the business.

Collateral

Loans can be secured or unsecured. Depending on the amount and purpose of the loan, collateral may be necessary in the form of accounts receivables, inventory, equipment, or real estate.

Customer

You are more likely to get a loan from a bank when you are already a customer in some other area. A small business should establish a depository relationship with a bank at a minimum as well as consider cash management services, personal banking, and investment services.

If this seems like a tall order, then take some comfort in the fact that it will not just be banks requiring more rigor and financial control of your business. Good discipline will get you the very best rates and lower your overall expenses for insurance and taxes as well as increase your chances of obtaining outside investors.

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